updated 06:28 pm EDT, Wed October 3, 2012

UTMS patents offered to Samsung in reciprocal agreement

One of the more notable documents filed with Judge Lucy Koh's court in the Apple versus Samsung post-trial motions is a letter from Apple intellectual property licensing director Boris Teskler to his equivalent at Samsung, Seongwoo Kim. The letter outlines a reciprocal patent agreement more in line with actual fair, reasonable, and non-discriminatory (FRAND) terms, rather than Samsung's proposed 2.4 percent rate of the entire device's purchase price.

Apple offered to license its FRAND UMTS patents, provided that Samsung "reciprocally agrees to this same, common royalty base, and same methodological approach to royalty rate, in licensing its declared-essential patents to Apple." Apple's estimates placed the price at $0.33 per device per royalty for use of the Apple patent portfolio, with the rate applied "to all Samsung units that Apple has not otherwise licensed." Apple requested a response by May 7, 2012, and no agreement was made.

Regarding Samsung's 2.4 percent request, Apple requested evidence that Samsung had ever received its full request in FRAND negotiations. Teskler's letter asks "Samsung's own valuations of its own patents, as conveyed to other companies, constitute information that is within Samsung's sole control. Again, can you provide any evidence that Samsung has ever negotiated a license based on a proposal that Samsung's declared-essential UMTS patents be valued at 2.4% of ASP?"

Patent analyst Florian Mueller believes that "Samsung's 2.4% demand is driven by a desire to create a situation in which Apple will, in order to bring that royalty rate down to an acceptable level, make Samsung an offer of a comprehensive cross-license agreement. I don't think Samsung even wants Apple to accept the 2.4% deal."

Should Apple agree to the high amount, every other FRAND licensor would demand similar terms. Apple claims that "Samsung's demand would imply approximately a 44% aggregate royalty burden on UMTS products. This is far above the 5-7% range that Samsung argued (in its earlier litigation with Ericsson and InterDigital) was the appropriate range for aggregate royalties." [viaFlorian Mueller]